Power

'Sad to see' | Co-firing ammonia with coal would gobble up at least four million tonnes of clean hydrogen: BNEF

Total announced Asian co-firing projects could require the equivalent of 40-220GW of electrolyser capacity, data from BNEF indicates

The 4.1GW Hekinan coal-fired power plant, one of the most polluting in the world.
The 4.1GW Hekinan coal-fired power plant, one of the most polluting in the world.Photo: Wikimedia
Deputy Editor
Co-firing ammonia with coal in a thermal power plant has come under fire for being dirtier than natural gas, significantly more expensive than renewables and a greenwashed excuse to keep polluting fossil fuel assets on line for as long as possible at the expense of the planet.

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And yet that is exactly what 15 countries now plan to do, according to new analysis from research house BloombergNEF (BNEF) — which has found that the ammonia co-firing plans of just 12 Asian nations could require enough low-carbon hydrogen production to require the installation of 220GW of electrolysers.

This has the potential to cause periodic spikes in the price of ammonia, widely used as a feedstock for fertiliser production, with knock-on implications for both the energy transition and global food costs.

BNEF’s latest report Ammonia: No Magical Bullet to Cut Asia’s Power Emissions, focused on announcements from South Korea, Japan, Indonesia, China, Malaysia, Taiwan, Thailand, Vietnam, the Philippines, India, Singapore and Bangladesh, estimating that a total of 42.79GW of coal-fired power in those countries is in line for ammonia co-firing.
Even if all announced projects adopted just 20% ammonia co-firing using renewable or blue (fossil gas and carbon capture and storage) production pathways, they would require 24.4 million tonnes of clean NH3, the research house estimates.
This, in turn would need four million tonnes of hydrogen as feedstock (ammonia is made by reacting hydrogen with nitrogen in the air via the energy-intensive Haber-Bosch process), around 2% of all 194 million tonnes produced from all the clean H2 projects in BNEF’s hydrogen database.
If all that supply were to be renewable, this would require the installation of 40GW of electrolysers, Hydrogen Insight calculates.

At 50% co-firing, the figure jumps to 61 million tonnes of ammonia, requiring the equivalent of 5% of the renewable hydrogen project pipeline, and at 100% co-firing, the amount of green ammonia required hits 122.1 million tonnes — requiring a staggering 22 million tonnes of green hydrogen per year.

Even if grey ammonia (made with hydrogen reformed from unabated fossil gas) were to be used rather than clean ammonia, it would take a significant chunk out of today's global NH3 production capacity, estimated at 239 million tonnes by Statista.
However, BNEF also emphasised to Hydrogen Insight that hydrogen and green ammonia supply for co-firing may not be an issue, as projects will ramp up in response to demand signals.
Even so, the exact manner in which clean ammonia demand for power production interacts with the global price of ammonia will depend on how the clean NH3 investment cycle matches up with wider demand growth.

“This also depends on the timing of when ammonia [demand] for each use case scale,” said the BNEF analyst who authored the report, Isshu Kikuma. “If other demand uses scale by 2030, the supply-demand balance could be tighter.”

If all 12 countries opted to co-fire in all 1.5TW of existing coal fired capacity (including those plants not yet announced), this would require enough ammonia to outstrip current global NH3 supply by three to 17 times, depending on the coal-to-ammonia ratio.

In fact, BNEF estimates that a single retrofitted 1GW thermal power plant combusting 100% ammonia would require three million tonnes of clean ammonia per year.

To give a sense of scale, the world’s first mega-project, Air Products’ 2.2GW Neom, currently under construction in Saudi Arabia at a cost of over $8bn, will produce 1.2 million tonnes of green ammonia per year.

This would mean that a single retrofitted 100% green ammonia plant would require green hydrogen supply stemming from 5.5GW of electrolyser capacity and more than $10bn of investment, Hydrogen Insight has calculated.

In addition, the costs to consumers in countries adopting ammonia co-firing would come to hundreds of millions of dollars in procurement costs and subsidies.

BNEF estimates that it would eventually cost electricity users seven to 14 times that of burning coal, depending on the year, noting that solar and batteries remain by far the cheapest option for power production in South Korea, Japan and Indonesia, as well as other Asian countries.

Japanese and South Korean companies have already attracted criticism for pitching ammonia co-firing to their poorer neighbours, which some experts have argued is an attempt to lock those nations in to dependence on coal and ammonia combustion technology made in Japan and South Korea.

BNEF argues that ammonia co-firing is still expensive and dirty to use in the power sector — and should be prioritised for use in fertiliser production — as well as an energy security risk that could inflame geopolitical tensions due to the need to import ammonia from locations such as Australia, the US and the Middle East.

“It's…sad to see governments and companies in Japan (my second home) and South Korea rush to commercialise ammonia co-firing technology at home and in the rest of Asia,” said BNEF’s head of hydrogen research, Martin Tengler, in a LinkedIn post. “We now count 12 jurisdictions in Asia eyeing ammonia combustion at thermal power plants.

“A cynic could say North East Asian companies built coal power plants at home and in South East Asia knowing these plants couldn't operate their entire economic lives if we were to comply with the Paris Agreement. Now these same companies are selling an expensive solution to the problem they helped create.”

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Published 23 April 2024, 12:26Updated 23 April 2024, 13:17